KiwiSaver: more going in, more potential over time

The increase in KiwiSaver contributions is a positive step for many New Zealanders. From 1 April 2026, the default employee and employer contribution rate increased from 3% to 3.5%, meaning more money is being invested for your future every payday. Over time, those additional contributions can compound and make a meaningful difference to your retirement balance.

If you can comfortably afford the increase, we are encouraging clients to consider moving to a 4% contribution rate now rather than waiting until the next scheduled increase. The difference between 3.5% and 4% may feel relatively small in each pay, but consistently investing more over many years can have a significant impact, especially when compounded over decades.

The government contribution is another important benefit to keep in mind. Eligible members can receive 25 cents for every dollar they contribute, up to a maximum of $260.72 each year, provided they meet the relevant eligibility requirements.

The right fund makes a significant difference

It is not only the amount you contribute that matters. The KiwiSaver fund you are invested in can make a substantial difference to your eventual balance, and not all funds are created equal.

The latest Morningstar KiwiSaver 360 report provides comparisons of fund performance over one, three, five and 10-year periods to 30 June 2026. Within the growth category, the top-performing fund over the 10-year period had returned approximately 10.2%, while the highest one-year return reported in the same category was 21.5%.

These figures demonstrate the potential difference between funds over time, but they should not be viewed as a prediction or promise. Past performance is not a guide to future performance, and investment returns will move up and down from year to year.

Understanding your own risk profile is crucial. Growth funds generally hold a higher proportion of growth assets such as shares and property, which can provide stronger long-term growth potential but may experience larger short-term fluctuations. Income assets such as cash and fixed interest generally provide greater stability, but usually have lower long-term growth potential.

The right mix of growth and income assets depends on factors including your age, investment timeframe, goals, financial circumstances and how comfortable you are with market volatility. Someone purchasing their first home soon may need a different approach from someone investing for retirement several decades away.

We can provide a free KiwiSaver review to help you assess your contribution rate, fund type, provider, fees and investment mix. We can help you understand whether your current KiwiSaver strategy is aligned with your goals and risk profile, and whether moving to 4%, or higher, or changing funds may be appropriate for you. Get in touch with our team to make sure your KiwiSaver is working as hard as it can for your future.

Investment performance figures are provided for information only. Past performance does not guarantee future performance, and the value of investments can rise and fall. Personalised financial advice should take into account your individual circumstances.